Home ›› 13 Nov 2022 ›› Front
The proper utilisation and disbursement of the fund created for the cottage, micro, small and medium enterprises (CMSMEs) are inevitable for the revival of the sector, said Bangladesh Bank Deputy Governor Abu Farah Md Nasser.
“Bangladesh Bank has created a Tk 2000 crore fund under the Credit Guaranty Scheme to provide collateral free loan to the CMSMEs, but only Tk 192 crore has been disbursed so far which is very disappointing,” he said, while speaking as the chief guest at a workshop.
The workshop, “Issues and Opportunities of CMSME Lending”, was organised by the Dhaka Chamber of Commerce & Industry (DCCI) at its office in the capital on Saturday.
At the workshop, the BB deputy governor unveiled a booklet, titled “Easy Access to CMSME Financing”, published by DCCI.
Terming CMSME as the engine of the national economy, speakers at the workshop said CMSME financing then is the fuel of that engine.
At the workshop, the BB deputy governor also said that to reach out to the CMSMEs, the banks should establish more sub-branches across the country, instead of agent banking, in order to cut extra administrative costs.
“We are going through a tough time due to the Ukraine-Russia war and if we try to control interest rates forcibly now, it may trigger a recession,” Nasser added.
He said, “Manufacturing and service sectors should get priority in getting CMSME loans right this moment to control inflation, considering the global scenario.”
Informing that the Bangladesh Bank has identified 19 clusters in CMSME sector, the BB official urged all the banks to provide loans to entrepreneurs from those clusters.
He informed the workshop that the Bangladesh Bank is planning to set up a digital bank which would especially focus on CMSME sector.
DCCI President Rizwan Rahman said CMSME sector plays a vital role in the growth of the national economy, but due to a lack of policy and financial support, the potentials of the sector are still untapped.
“Commercial banks and financial institutions sometimes consider providing CMSME loans risky. And when they provide such loans, the banks prefer medium entrepreneurs to the small ones,” he said, adding that till FY22, 73.77% of the government’s stimulus fund, or Tk 147.46 billion, for pandemic-affected entrepreneurs has been disbursed, but most of it was provided to medium enterprises.
He also said that regulators should give CMSMEs more access to information and financial assistance so that they can have the ability to manufacture a lot and compete in the supply chain process.
Presenting one of the two keynotes at the workshop, Bangladesh Bank’s Director of SME and Special Programmes Department Md Jaker Hossain said the CMSME sector’s contribution to GDP is 25% now which in 2024 it will be around 32% and by 2027, it is expected to reach 40%. “So there is no scope of economic growth without CMSME.”
He said, “If an entrepreneur seeks a loan under the stipulated threshold with necessary documents, banks have no other choice but to sanction the loan.”
He also said that Bangladesh Bank has the plan to disburse 50% of total loans to the cottage, micro and small entrepreneurs and 15% at least to women CMSMEs.
SME Foundation’s General Manager Md Nazeem Satter, in the second keynote, highlighted that there are more than 7.8 million CMSMEs across the country. “Only banks are not sufficient to ensure loans for CMSMEs rather we may utilise the alternatives like MFIs, NGO Foundation, Karmasangsthan Bank, BSCIC, SME Foundation etc,” he said.
“The country’s banks have more than 10,000 branches altogether which is sufficient to disburse CMSME loans to the remote parts of the country. If we can utilise all these branches, we do not need any specialised SME bank,” he observed.
